Bank leaves veterans in the dark

by Luz Rimban

Tuesday, April 12th, 2005

Part two of the series deals with the long history of plunder of the PVB dating back to the Marcos era and even before that. It weaves the story of the bank’s plunder with that of the plight of veterans who until now, in the twilight of their years, are still fighting for what is rightfully theirs.

LAST SATURDAY, members of the Philippine Veterans’ Legion (PVL) broke tradition when they spent “Araw ng Kagitingan,” or the Fall of Bataan in Fort Bonifacio. For years, these old men, easily recognizable by boat-shaped military caps, had traveled all the way to Mount Samat to hear the president speak of war and the veterans’ forgotten exploits. But they are growing weaker, and physically and financially incapable of making the trip to the place that marked Filipino surrender to the Japanese. Besides, says PVL chairman Frank Cedula, the veterans feel “the government isn’t doing anything to help” them, especially now that they are facing a different kind of enemy.

Sixty years ago, a grateful nation honored Filipino soldiers and guerillas for defending the country against Japanese invaders. Cedula himself says his personal story is the stuff war movies are made of, having been a 17-year-old reservist who endured seven stabs from a Japanese bayonet in the Sierra Madre mountains in 1941. For their heroism, the Philippine and U.S. governments promised them, their widows and orphans financial compensation and other rewards.

It took ages before many of those promises came true; some remain unfulfilled. What did materialize early on was the creation of a trust fund for World War II veterans and their heirs that would come from the $20 million payment by Japan for the losses and damage it inflicted on the Philippines. Known as the reparations fund, the money was given in 1956. It eventually went into the creation of the Philippine Veterans Bank (PVB), whose stockholders were supposed to be the veterans and their heirs.

To the veterans, the bank is the most tangible tribute of the nation’s gratitude, a financial monument to their service during the war, an edifice of honor built in their name. For all that, though, the veterans and their heirs remain mere titular stockholders of PVB, with little say in the running of the bank. In truth, they also know little about the bank’s operations, as well as that of its affiliates, largely because these suffer from a lack of accountability and transparency.

This has made it possible for politicians, their cronies and bank directors to treat the PVB as their personal piggy bank, dipping their fingers into its coffers without much fear of getting caught. Worse, veterans say that one of their own, who eventually became bank chairman, seems to have failed to watch out for them. At the very least, they fear he let others abuse the bank’s considerable holdings — as well as those of related institutions.

The PVB had been designated as a depository of government funds. Thus, the bank has been holding money belonging to government agencies and local governments; the Philippine Health Insurance Corporation (Philhealth) is one of those currently with huge deposits at the PVB. In addition, the bank holds some P2 billion in trust for the pre-need company College Assurance Plan (CAP).

Such holdings help justify the generous P650,000 that PVB Chairman Emmanuel de Ocampo gets each month in compensation for running the bank, an amount de Ocampo admitted to receiving in a Senate hearing in 2002. De Ocampo also described the work he was doing to merit such a salary: “I had to do some marketing, I have to do some management, I have to help, Your Honor. And besides, the P650,000 includes expenses in the board which I have to sign as chairman.”

But veterans say that for the huge salary he gets, de Ocampo has failed to protect their interests at the PVB. They cite the fact that de Ocampo — himself a war veteran who retired a colonel — was already a bank director prior to its closure in 1985, when cronies of then President Ferdinand Marcos, like Herminio Disini, were running away with the bank’s money. Behest loans to such Marcos friends led to the bank’s closure.

Nothing much changed when the bank was rehabilitated and then reopened in 1992. The plunder continued, even after the Bangko Sentral repeatedly warned bank officials to stop abusing their powers and privileges. In a February 16, 2000 letter to then President Joseph Estrada, then PVB President B. Teodoro Eusebio wrote, “Many…violations of BSP (Bangko Sentral ng Pilipinas) regulations, diversion of bank’s income to personal accounts, dishonesty and inefficiency have been discovered.” Eusebio pledged to “clean the bank” but found himself out of the PVB presidency not long after. At that time, the directors of the bank included Estrada’s sister, Pilarica Ejercito.

Veterans say that among those who are currently taking advantage of the bank’s assets is a director who allegedly falsified his credentials as a veteran’s son to get himself into the PVB and to secure huge loans for his companies. Last year the bank hastily granted a P550-million loan to a company owned by a Filipino-Chinese businessman with close ties to presidents past and present, even if the firm failed to comply with the requirements. The loan remains unpaid a year after it fell due.

Veterans trace part of the problem to de Ocampo and his all-encompassing financial and political power over the bank, as well as over related organizations that control it. Aside from being PVB chairman, de Ocampo also heads the Veterans Federation of the Philippines (VFP) and the Board of Trustees of the Veterans of World War II. A founding member of the Hunters’ ROTC, de Ocampo took part in daring guerilla actions during the war. One of these was the raid on the Bilibid prisons in Muntinlupa in 1943 to free Filipino prisoners of war. De Ocampo was then head of the 47th Regiment.

His fellow veterans now fear he has looked the other way as other raids have gone on, this time at PVB and its affiliates. De Ocampo was unavailable for interview, but Miguel Villa-Real, the bank’s assistant vice president for corporate communications, says that contrary to his fellow veterans’ belief, de Ocampo has been active in pursuing the cause of veterans at the bank. De Ocampo helped press for the increase in the veterans’ monthly pension from P1,000 to the present P5,000, says Villa-Real. He also says de Ocampo’s being a key figure in the bank’s reopening in 1985 is a major contribution to the veterans’ cause.

Yet it has certainly not helped de Ocampo any that the PVB, the VFP and the Board of Trustees all suffer from the lack of transparency even as all three sit on a huge amount of cash. For instance, the PVB, which was initially meant to be a public corporation under the defense secretary’s supervision and control, is a private bank accepting government deposits and exempt from transparency and scrutiny.

Veterans say they also have no idea how money given to it is handled by the Board of Trustees, an entity established by Republic Act 3518, the law that created the PVB. The Board was designated as custodian of 20 percent of the PVB’s earnings, an amount that was supposed to be made “available for ‘grants-in-aid’ to veterans, their widows, orphans or compulsory heirs, for educational, social, charitable and rehabilitation purposes, to organizations doing service for the veterans.” The composition of the Board, the law said, was to be determined by the Supreme Council of the VFP.

Created by another law in 1956, the VFP is an umbrella group of various veterans’ organizations. These include not only World War II groups but also those made up of former soldiers who took part in the Korean War in 1950. Its cash income is collected from the veterans’ pension, automatically deducted by the PVAO. In the past few years, the VFP has been getting one percent from each veteran’s annual pension, or P500 per veteran a year, supposedly for its operations. Many say they were not consulted when the VFP and the PVAO agreed upon these deductions. This is why Philippine Veterans’ Legion national adjutant Manuel Reyes has argued that veterans could get back that P500 collected from them yearly, provided they formally request the PVAO in writing to stop the deductions.

The VFP is estimated to be collecting a total of about P50 million annually, including the veterans’ pension deductions. But its books have never been scrutinized by the Commission on Audit (COA).

Here actually lies a problem, and a divergence of attitude among government agencies toward the PVB and the VFP: The Supreme Court, in a labor case involving former PVB employees, maintained that the PVB is a private entity because it is owned by World War II veterans and not by the government. The Department of National Defense (DND), meanwhile, cites the original law that put the bank and the VFP under the supervision and control of the defense secretary. In fact, when Charlie Beloso, chairman of the Crusade to Reform Veterans’ Organizations (CREVO) and a wartime soldier who fought under war hero Macario Peralta, filed plunder charges against the PVB officials in 2002, the DND legal department endorsed the suit to the Ombudsman for the military, because it considered the bank’s officers public officials.

The COA, for its part, maintains that there is no government money in the VFP, hence it cannot be audited. Yet the law that created it clearly called it a public corporation. Besides, says a DND official, there are several pieces of property belonging to veterans and under the control of the Foundation, for which the VFP refuses to pay taxes because it has cited its being a government entity.

And then there is the VFP’s disqualification from the party-list election because it was an “adjunct of the government.” In 2001, the VFP fielded two candidates in the House of Representatives who won. Beloso had also run in the same race, under a party called the Veteran Care Organization. But the VFP sought his disqualification, because it said the VFP was the “only veterans’ organization in the Philippines.” Beloso countersued, seeking the VFP candidates’ disqualification. He argued that the VFP is a government corporation and cited the law saying the “VFP shall be non-sectarian and non-political.” The Commission on Elections sided with him, disqualifying VFP’s candidates.

More than its affiliates, though, it is the Philippine Veterans’ Bank that preoccupies the minds of those who fought in World War II, because of the meaning it has for them. The bank is often the subject of discussion among members of Cedula’s Philippine Veterans’ Legion, which is composed of soldiers and guerillas that signed up with the USAFFE (United States Armed Forces in the Far East).

The Legion meets regularly at the old Philippine Veterans’ Affairs Office (PVAO) compound in Arroceros, Manila. But its meetings are now fewer and far between, because the members are getting too old or are too ill to make the trip to the old PVAO. They fear there might be one member less every meeting, either because of death or illness. Earlier this year, Legion members put up a sign on a wall at the PVL office that reads: “This is our last hurrah (probably).”

Indeed, moving about is a taxing and tiring activity for many veterans. Mostly in their 80s, Legion officials are just ghosts of the young men they were in the 1940s, when their able bodies could still take a stab from a bayonet. Cedula, who endured five days of pain, thirst and starvation before fellow Filipinos found him bleeding from his stab wounds more than half a century ago, is an exception, and is still quite sprightly at age 82.

Most veterans are like Miguel Marcos, who signed up as a USAFFE volunteer in 1941 and saw action as a guerilla in 1942, along with Cedula. Marcos was a tall high school student when the war broke out. Now he is thin, gaunt and walks slowly, with a stoop. But he still takes public transportation to his home in Valenzuela City.

There is also Manuel Reyes, another former guerilla and now the Legion’s director for Luzon. Reyes’s eyesight is failing, and he needs a magnifying glass to read the papers and readings that other veterans share with him.

Medical assistance is what these veterans need most now. In fact, the PVL has been trying to scrape up funds to build the Angel Suarez Convalescent Home, where they hope members can take refuge in their old age. Angel Suarez was a guerilla and former PVL leader. A notice at the PVL office in Makati says that the convalescent home will rise on that site, but there is hardly any indication of that happening anytime soon. By the time it does, the veterans may no longer be around to use it.

Beloso says World War II veterans are an endangered species. Based on PVAO statistics, they are dying at the rate of 20 a day. If only 5,000 members of the USAFFE and 17,000 recognized guerillas remain, Cedula says, that makes some 22,000 World War II veterans still living. But at the rate they are dying, they might all be gone in four years.

De Ocampo himself is in his 80s. But unlike him, many of his fellow veterans live in poverty, says Braulio Bumanglag whose own father fought as a guerilla in Isabela during the war, and who counts himself among the veterans’ sons and daughters supporting their cause. That is why he, Beloso, Cedula and the rest of those in various veterans’ groups are fuming over how they say bank officials have been enriching themselves.

For sure, the niggardly P80 cash dividend check each veteran gets annually as a PVB stockholder barely covers transportation when they claim pension checks, or apply for medical assistance, which at their age is their most pressing concern.

Villa-Real says, however, that the veterans can avail of free medical and dental care at the VFP Outpatient Center in Taguig that gets support from the bank. Also among the bank’s “substantial assistance to World War II veterans,” says Villa-Real, are pension loans of P24,000, payable in 12 months, or P40,000, payable in nine months, at interest rates ranging from nine to 12 percent. In addition, veterans can maintain a passbook account with only P100, and a minimum balance of P500 to earn interest.

Whenever it is time for the veterans to collect their pension checks, Villa-Real says, “Oplan Beterano” kicks into gear. This is when bank provides tents for shade, brings out chairs and serves water and biscuits to the former soldiers. Portable toilets are set up and an ambulance is put on standby. Villa-Real says “Oplan Beterano” was named the joint winner in the customer service category in the 2004 International Asian Banking Awards.

But perhaps the bank and the VFP should not expect any award from the veterans, who have grown disillusioned over what they had perceived as the reward for their bravery in war. CREVO’s Beloso has even been writing members of Congress and the media to express his outrage that the Federation has somehow managed to skirt election laws.

In the last elections, another party using similar initials and affiliated with the Federation fielded a candidate and won. The Veterans Freedom Party is now represented in Congress by Ernesto Gidaya, former chairman of the PVAO. Said Beloso in a statement: “The Veterans Freedom Party was organized only sixteen days and not one full year before the date set to apply for accreditation under the Party List System. This act of the Veterans Federation Party is a gross and flagrant violation of the Party List Law.”

Many of the men like Beloso who once defended the country against the Japanese feel that no one seems to be listening to them anymore, however hard they scream. Although they are willing to fight against what could be their last adversary, they say they are fast being sapped of the little strength they have left — and running out of time.